South Korean President Lee Jae-myung (이재명) said on Monday that measures to normalise the stock market had only reached the stage of removing a few big stones, stressing the need for further institutional improvements.

Lee made the remarks after receiving a Financial Services Commission work report at a Cabinet meeting and emergency economic review session held at the Blue House. He said the commission's efforts to overhaul the financial system were showing effects in normalising the stock market.

He added that the measures to normalise the stock market must continue. He asked when he would be able to see what the policy office was preparing.

Kim Yong-beom (김용범), the Blue House policy chief, replied that there were two parts: legal measures and structural reforms within the exchange itself. He said he would prepare them and report back.

Lee said only a few big stones had been removed and asked whether they should also remove the small stones. He said careful correction of issues that appear small could gradually improve the market.

Lee also mentioned the issue of undervaluation in the domestic stock market.

He asked whether the market was still heavily undervalued compared with other countries. Lee Eok-won (이억원), chairman of the Financial Services Commission, replied that it had risen a lot but was still undervalued relative to corporate earnings.

Separately, foreign media including Bloomberg reported that South Korean stocks had jumped to the world's eighth-largest market, surpassing Britain. The combined market capitalisation of South Korea's listed companies has surged more than 45 percent this year to $4.04 trillion, while Britain posted about a 3 percent rise to $3.99 trillion.

As of the end of 2024, Britain's market was about twice the size of South Korea's.